Dow, S&P Wrap Up Volatile Week With Gains

Dow, S&P Set New Intraday Highs on Late-Day Buying

Stocks Pick Up Steam With Closing Bell Looming

How Volatile Has This Week Been? Very.

Dow, S&P Wrap Up Volatile Week With Gains

Both the S&P and Dow Jones Industrial Average have finished up a rocky week with gains of more than 1%. The Dow closed up 1.4%, while the S&P rose 1.5%.

U.S. stocks started the day strong before sliding as much as 2% in the afternoon. But indexes began to rally into the closing bell, briefly adding more than 2% in the final minutes of trading, before moderating at the close.

Chelsey Dulaney

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Dow, S&P Set New Intraday Highs on Late-Day Buying

A day after late selling drove the Dow and S&P into correction territory, a flurry of end-of-day buying boosted both indexes on Friday.

The Dow and S&P are both up about 2%, setting new intraday highs in the final minutes of trading. The indexes had fallen roughly 2% earlier in the day.

Chelsey Dulaney

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Investors Betting on More Swings in U.S. Bond Market

Will things calm down a bit next week?

Bond investors aren't betting on it.

The Merrill Lynch Option Volatility Estimate Index, the U.S. fixed-income market's equivalent of the Cboe Volatility Index, climbed this week to 67.85, its highest level in nearly 10 months, according to FactSet. The last time the index traded above those levels was in April.

Still, it's worth noting the MOVE Index remains well off its historical highs. The index topped 100 during the so-called Taper Tantrum of 2013, when concerns about the Federal Reserve slowing down its asset purchases sent bond yields around the world rocketing higher, and jumped past 250 as the financial crisis roiled the markets in 2008.

Akane Otani

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Stocks Pick Up Steam With Closing Bell Looming

U.S. stocks have been oscillating all day, but both the Dow and S&P are gaining steam with about half an hour left in the session.

The Dow is up 120 points, or 0.5%, after swinging about 850 points from its intraday high and low points.

The S&P is up 0.7%. It had fallen as much 1.9% earlier in the day.

Chelsey Dulaney

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Stocks, Bond Yields Move Together Again

Stocks and bond yields have been moving in tandem this afternoon, with both turning lower heading into the closing bell after rising together earlier in the afternoon.

Investors are watching the relationship between stocks and bond yields closely after a sharp incease in U.S. yields was cited as a driver behind the last week's stock selloff.

After years of low interest rates and accomodative central-bank policy, investors are now preparing for higher rates as the Federal Reserve and other central banks withdraw crisis-era stimulus.

Higher rates and bond yields can hurt stocks by making corporate borrowing more expensive and by reducing the relative attractiveness of stocks. Higher rates can also pressure equities by constraining economic growth.

The yield on the benchmark 10-year U.S. Treasury note is at 2.822%, according to Tradeweb, after earlier falling below 2.80% when stocks were down. Its four-year high from last week was 2.852%.

How Volatile Has This Week Been? Very.

It's not just your imagination: U.S. stocks have swung more than usual amid this week's global stock rout.

The Dow Jones Industrial Average has now swung at least 500 points from its session high to its low on five consecutive trading days--something that last happened in October 2008, according to WSJ Market Data Group. The Dow was recently up 83 points, or 0.4%, at 23944, about 265 points off its intraday high and 583 points above its intraday low.

Akane Otani

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Investors Back Off Bets on Four Rate Hikes

One factor investors have blamed for the week's selloff is concern that a pickup in inflation and growth could push the Federal Reserve to raise rates more quickly than expected.

But it looks like a volatile week for global stocks and bonds has pushed some investors to revisit those bets.

Federal-funds futures, used by traders to place bets on the course of interest rates, recently showed a 16.5% chance of the Fed raising short-term interest rates at least four times by the end of the year, according to data from CME Group. That's down from 20.5% yesterday and 27.5% one week ago. The market is also pricing in slightly lower odds for a March rate hike, with futures pointing to a 72% chance the Fed raises interest rates then, versus 76% a day ago.

"The decline in equities and the rise in market volatility will worry the Fed and induce considerable hand wringing," UBS economist Seth Carpenter wrote in a note. "We continue to see a March hike but our confidence is diminished and our call is predicated on a rapid resolution of the current market disruption."

Akane Otani

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'TGIF' For Stocks After Volatile Week

Stocks have moved between gains and losses in the final hours of trading Friday. If history is any guide, the S&P could find some support heading into the closing bell.

Friday is usually the best day of the week for the S&P. Over the past year, the S&P has ended up on 63.5% of Fridays, according to WSJ Market Data Group, the highest percentage of the week's five trading days.

Covering "short" bets involves buying back the stocks that the investor is betting against, which can drive prices higher.

Over the S&P's entire history, stocks have closed higher on 59.1% of Fridays. The next-best day of the week for stocks has histroically been Thursday, when stocks closed up 54.6% of the time.

Chelsey Dulaney

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Stocks Bounce Higher After S&P 500 Nears Key Level

Stocks bounced off their lows and recently turned positive shortly after the S&P 500 flirted with its 200-day moving average, a key technical level, around 2540. The index was recently at 2583, up 0.1% on the day.

"It is getting really close to paying attention time," if the S&P 500 breaks below the 200-day moving average, says Brad McMillan, chief investment officer for Commonwealth Financial Network, in a note. "It is not, however, getting close (at least for me) to reacting time" given a positive earnings and economic backdrop, he says.

Amrith Ramkumar

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Nasdaq Composite on Pace to End the Day in Correction Territory

Thursday's stock selloff pulled the S&P 500 and Dow Jones Industrial Average into correction territory, or 10% below their all-time highs. As of midday, the Nasdaq Composite looked set to end the week there, too.

The tech-heavy index was recently down 1% at 6710.69, or about 10.6% below its Jan. 26 high. If it holds its declines until the end of the trading day, it will officially enter correction territory as well.

S&P 500 Could Eclipse 2017's Number of 1% Drops

A 1% decline in the S&P today would be the index's fifth of the year, exceeding last year's total of four 1% drops just five weeks into the new year. All five of this year's 1% declines came in the last nine sessions.

The index was recently down 0.7%, while the Nasdaq is down 0.9% and the Dow has shed 0.9%.

Amrith Ramkumar

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Individual Investors Are the Most Pessimistic They've Been in Months

Individual investors' sentiment took a hit after this week's global stock selloff.

The share of individual investors who expect stock prices to fall over the next six months jumped 6.3 percentage points to 35% in the week ended Wednesday, the highest level in three months, according to the American Association of Individual Investors' latest survey. Meanwhile, the share of bullish investors--those expecting stocks to rise over the next six months--slid 7.7 percentage points to 37%, the lowest level since early December.

Investors may actually be more pessimistic than the survey suggests--AAII's weekly surveys close on Wednesday, meaning respondents would have submitted their answers before U.S. stocks fell into correction territory Thursday. Still, AAII says, "many individual investors have been expecting a return of volatility and/or a decline in stock prices." That means some individuals may be looking to the market's drawdown as an opportunity to scoop up stocks for cheaper, rather than an ominous sign.

Akane Otani

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Volatility Could Persist as Investors Await Inflation Data

Some investors have said this week they are waiting for more evidence of a market bottom and data on inflation before changing their positions. That could extend the stretch of recent volatility as money managers grapple with whether they are missing a warning sign later in the economic cycle, according to some analysts.

Data on January consumer and producer prices, two closely-watched inflation measures, are set to be released next week.

"We believe the decline ... is yet another late-cycle correction and not the first installment of something more sinister. But we are flexible in that view and remain open to evidence tilting toward the latter possibility," Doug Ramsey, chief investment officer of Leuthold Group, says in a note to clients.

Amrith Ramkumar

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Oil Is Having a Rough Week Too

The oil market is also having a rocky week.

U.S. stocks wavered Friday but oil prices have moved decisively lower. U.S. crude futures tumbled to their lowest levels since December, on track to extend their slide to a sixth straight session. U.S. crude futures are down $1.42, or 2.32%, at $59.73 a barrel on the New York Mercantile Exchange.

"There's a sense of nervousness right now. People are starting to look at whether there will be some kind of contagion--what's out there?" said Ric Navy, senior vice president for energy futures at R.J. O'Brien & Associates LLC.

Oil prices and equities have been moving in closer alignment. But oil is also contending with an onslaught of production from U.S. companies taking advantage of a rally that had pushed prices up more than 55% from a low in June to $66.14 in January--their highest levels in more than three years.

The U.S. Energy Information Administration this week raised its forecast for U.S. production. It predicts that output will average 10.6 million barrels a day this year--breaking a record set in 1970.

Alison Sider

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Another Choppy Session for U.S. Stocks

Will we end the day higher or lower?

Hard to tell, based on the first couple hours of trading. U.S. stocks have already flipped between gains and losses several times, with the Dow Jones Industrial Average falling as low as 23633.28 and rising as high as 24209.50, a 576-point intraday range.

At this point, "there's no telling whether it's going to be over in a few days or a few weeks," Frank Cappelleri, executive director of Instinet, said by phone.

Akane Otani

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How the Stock Slide Could Impact the Economy

U.S. stocks’ descent into correction territory this week has investors questioning the economic ramifications of the market rout.

Stocks stabilized on Friday but remain down nearly 10% from their January highs after both the Dow and S&P closed in correction territory a day earlier. Federal Reserve officials have taken the selloff in stride, with Dallas Fed President Robert Kaplan saying Wednesday that “corrections are healthy.”

But some investors fear a more prolonged market rout will hurt consumer and business confidence and dampen spending that has helped propel the economy in recent years.

“The fundamentals of the economy may look strong now, but it won't be that way for long, if stocks do not rally back from these sobering losses,” said Chris Rupkey, chief financial economist at MUFG in a note Thursday.

Paul Mortimer-Lee, chief market economist at BNP Paribas, says the recent selloff is "probably a warning of how this cycle may end."

He warns that the market rout could encourage consumers to boost savings and reduce investment, which could weigh on economic activity.

"At some stage a bigger and more economically damaging market correction seems a very serious possibility<" said Mr. Mortimer-Lee.

Expedia Slide Hurts Internet Stocks

Expedia's post-earnings tumble is weighing on other big internet companies like Amazon and Netflix. Expedia is down 17% after the travel company reported that earnings were hurt by increased spending, while Amazon is down 1.1% and Netflix is down 2.3%.

Amazon is down despite a WSJ report that the e-commerce giant is preparing to launch a delivery service for businesses. Similar reports of Amazon disrupting other industries have typically sent shares higher.

In other highflying technology stocks, Alphabet is up 1.9%, while Facebook is up 1.5% and Apple is up 1.2%.

Amrith Ramkumar

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U.S. Stocks Back in the Red

U.S. stocks are back in negative territory, reversing course after starting the day higher. The S&P 500 recently fell 0.2% after rising as much as 1.5% earlier in the session.

The Dow Jones Industrial Average has shed 160 points after gaining more than 300 earlier in the session.

Among the biggest laggards: energy shares, which are falling with U.S. crude oil prices. Consumer-discretionary shares in the S&P 500 are also taking a hit.

Akane Otani, Chelsey Dulaney

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Drop in Oil Continues to Weigh on Stocks

U.S. crude oil has fallen back below $60 a barrel for the first time in 2018, weighing on energy stocks. The S&P 500 energy sector is down 0.8% Friday, bringing this week's losses to 8.8%. The broader S&P index is down 0.1%.

Oil has taken a hit from rising U.S. production and worries over investors' appetite for riskier investments as interest rates rise. Prices are on track for a sixth straight day of declines.

Amrith Ramkumar

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Don't Call the End of the Selloff Yet

U.S. stocks have risen in the first two hours of trading Friday, but don't breathe a sigh of relief just yet, says JJ Kinahan, chief market strategist at TD Ameritrade.

"Investors might want to be careful late in the session, because it's in the last hour that things have gotten pretty weird lately," he wrote in a note. That was true Thursday, when stock losses rapidly accelerated in the last half hour of the trading day, as well as Monday, when the Dow Jones Industrial Average tumbled nearly 1,600 points before paring losses.

Akane Otani

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Wall Street 'Fear Gauge' Retreats as Stocks Jump

A measure of traders' expectations for swings in the S&P 500 is falling again as U.S. stocks rebound.

The Cboe Volatility Index, or VIX, which had posted its biggest one-day percentage increase ever earlier this week, was recently down 12% to 29.56. That's well off the 50.30 it had briefly touched Tuesday. Still, the VIX remains on course for its biggest weekly percentage gains in years: the index was recently up 69% on the week, headed toward its biggest weekly gain since August 2015.